What Major Economic Problems Exist in the Philippines?

The economy of the Philippines has grown at a healthy rate exceeding 6 percent annually since 2012, but concerns about high inflation remain a potential threat to the Philippine economy, as of 2015. Other issues include a high unemployment rate, barriers to foreign land ownership and investment, and government corruption.

The inflation rate in the Philippines rose in 2014 to 4.2 percent, from the 2.9 percent in 2013. Both high inflation and uncertain inflation can make a nation's economy less desirable for investment. While 4.2 percent is not necessarily dangerously high, continued inflation increases might cause for concern.

Another concern regarding the economy of the Philippines is the difficulty investors face. The World Bank gives the Philippines worse-than-average ratings for ease of doing business. Current regulations for investing and doing business, as well as limitations on foreign ownership of businesses in the Philippines, may hamper its economy's future growth.

Transparency International's negative ratings of the Philippines for its high levels of corruption also threaten to stand in the way of economic growth. Businesses are cautious when investing in the Philippines in part because the judicial system is perceived to be both corrupt and incompetent. Many of the issues of corruption in the Philippines trace back to widespread nepotism and cronyism.